The Rich Energy drinks company’s public meltdown has been the biggest story in F1 over the last ten days, but it’s a complicated one. Here’s the full rundown.
This time last year, the Rich Energy brand was virtually unknown, either within the F1 community or outside it. The first time the name really cropped up was when the small, mysterious British energy drinks company was linked with a buyout of the Force India team – they having gone into administration during the summer break. There were several buyers rumoured to be interested in the team but, in what would later become the modus operandi of the RE Twitter account, they revealed that they had, apparently, injected 30 million pounds into Force India in an effort to stave off administration and take over the team.
There was never any evidence of this. Force India were sold to Racing Point, a consortium led by Lawrence Stroll, much to Rich Energy’s chagrin. This was where the first public backlash against the drinks company began, as publicly available financial records didn’t indicate anywhere near the capital required to have ever injected the money they claimed to have done.
The public face and CEO of Rich Energy, William Storey, cuts a memorable character. Revealed as the majority shareholder with two thirds of the company’s shares, Storey is stocky, tall and with a long beard reminiscent of ZZ Top’s Billy Gibbons, he became a constant presence in the second half of 2018 as his company began flirting with the Williams team over sponsorship.
Negotiations seemed to be in full flow at the United States Grand Prix, with Storey pictured on the grid with Deputy Team Principal Claire Williams. But, for whatever reason, the deal didn’t happen and, shortly after and out of the blue, Haas announced that the Rich Energy brand would become their title sponsor for 2019. There were still question marks over the company’s legitimacy but, with Haas seemingly satisfied by the financial guarantees made by Storey and the other company shareholders, sentiment towards Rich Energy became more positive. With the striking colour scheme of the black and gold reminiscent of the 1970s John Player Lotus’, there was even some excitement about the potential.
An unusual social media approach
The Rich Energy Haas VF19 was launched in London in February, revealing a gorgeous livery and positivity about the deal as Storey addressed rumours about the actual existence of the drink. Finding cans of the drink in shops, or in the wild, proved elusive, while the only sales point appeared to be the company’s own website or them fulfilling orders through Amazon.
When F1 pre-season testing began, on the occasions where Haas would fare well or finish ahead of a Red Bull car, the Rich Energy Twitter account would put up hashtags like #BetterThanRedBull or #givesyouhorns – trying to cheekily taunt the drinks giant that owns the Red Bull Racing and Toro Rosso teams. It didn’t go down particularly well with fans, who criticised this strategy in droves – meeting with stony silence. Were Rich Energy deterred by the backlash? Not at all.
Enter Whyte Bikes and the copyright row
Rich Energy’s logo, that of a stag, came under scrutiny of the UK courts early in 2019. British cycling manufacturer Whyte Bikes, trading under ATB Sales, decided to take Rich Energy to court for a breach of copyright law due to the striking similarity of the logos. It’s worth noting that Whyte Bikes’ stag logo was only submitted for trademark in 2017, with Storey registering opposition to it in May 2018. It was too late, though, with the logo going to Whyte Bikes officially in April 2018.
As this screenshot from Whyte Bikes Facebook page shows, the company have used the stag logo for more than a decade, and the registration of the trademark in late 2017 was to cut off Rich Energy’s attempts at taking it.
At the initial court hearing between Whyte Bikes and the defendants (made up of Rich Energy, Staxoweb (the RE logo designer) and William Storey himself, a full dissection of both sides arguments was heard. Storey gave evidence, as did Whyte’s Company Director Guy Farrant. Judge Melissa Clark, after consideration, ruled in Whyte’s favour, saying: “I am satisfied that some of Mr Storey’s evidence was incorrect or misleading and that he was involved in the manufacture of documents during the course of litigation to provide additional support for the Defendants’ case.”
“I do not accept either Mr Storey or Mr Kelly (Staxoweb) as credible or reliable witnesses and I treat all of their evidence with a high degree of caution.”
It was a damning verdict, essentially boiling down to legal-speak calling out of Storey and Kelly as liars. A date was set at the end of June to allow for further arguments or an application to appeal the decision by Rich Energy. Taking to Twitter again, Rich Energy vowed to appeal and signalled confidence that they could overturn the ruling.
Sentiment turns against Rich Energy
Having lost their case against Whyte Bikes, Haas ran the contentious logo on their cars for the following round in Monaco. The stag logo then disappeared for the Canadian Grand Prix, and hasn’t reappeared since. A tweet from Rich Energy said they had instructed Haas to withdraw the logo: “Whilst we own the stag trademarks & registrations worldwide Inc Canada we don’t want any media circus for team whilst we contest baseless case with @WhyteBikes & win.”
With the Twitter account also antagonising and taunting the Whyte Bikes account by calling them ‘Mickey Mouse’, comments on their posts became increasingly negative. A bizarre attack on Top Gear presenter Chris Harris followed, with the account calling Harris’ work ‘low-rent’, adding further fuel to the backlash. William Storey continued to show up at races, including the French Grand Prix last month where he drove a 2012 Renault around Paul Ricard, but hasn’t been at a Grand Prix since.
The court orders logo removal
The court order to decide how to proceed with the logo case met at the UK’s Intellectual Property buildings in London on the Thursday of the Austrian Grand Prix, and it didn’t go well for Rich Energy. The company were ordered to remove the logo entirely from everything – merchandise, drinks cans, clothing, sponsored products (which would include the Haas cars). This has to be done by July 18th. If it can’t be removed, then offending items must be handed over to Whyte Bikes by 4pm on August 1st. On top of this, financial damages of £35,416 were ordered to be paid to Whyte by July 11th. Should Rich Energy ignore any of these court orders, they were warned that they could be held in contempt of court and face prison or fines.
Intriguingly, a further order stated that Rich Energy must hand over all financial details, including the who, how, where, when and how information regarding the Haas sponsorship deal. This means that Whyte Bikes will become privy to how exactly this small drinks company could afford a multi-million euro, four year sponsorship of a Formula 1 team.
The fine of £35,416 was not paid to Whyte Bikes on time. Guy Farrant from Whyte confirmed to FormulaSpy that they will now be taking action against Rich Energy to have them and Staxoweb wound up, as well as petitioning to have William Storey declared bankrupt. At the time of writing (16th July) – Rich Energy have not removed the offending logo from their online presence.
All hell breaks loose
The saga ramped up over the Silverstone weekend. On Wednesday, Rich Energy tweeted that they had terminated their sponsorship contract with Haas and cited the team’s poor on track performance. This was no formal press release, and Haas remained silent on the issue. Addressing media on Thursday, team boss Guenther Steiner said that Rich Energy remained the team’s title sponsor and the cars usual livery would remain on the cars. It quickly became apparent that an internal war was going on at Rich Energy.
A statement released by a subsidiary Twitter account (Rich Energy Netherlands – an account which has since been deactivated), said that the tweet had been done by a ‘rogue individual’ and that the company wished to proceed with their title sponsorship agreement with Haas. They said that they were going through legal processes to have the individual removed from executive responsibilities.
FormulaSpy has been reliably informed that minority shareholders, including Neville Weston, are attempting to take control of Rich Energy. The most recent publicly available shareholders report shows Weston as holding two shares out of 100 – with Storey holding 64. This makes taking over the company difficult, and Storey knows it:
@rich_energy CEO @_williamstorey has commented "The ludicrous statement by minority shareholders cosy with @redbull & @WhyteBikes is risible. Their attempted palace coup has failed. I control all of the assets of @rich_energy & have support of all key stakeholders" #RichEnergy pic.twitter.com/1d32m1AELG
— Rich Energy (@rich_energy) July 11, 2019
The Twitter account then revealed a letter, sent from agents Ebury Partnership on behalf of Haas, sent to Mr. Weston expressing concerns with Rich Energy. They said that Haas are happy to continue with the company and sponsorship deal, provided that they are given proof that William Storey is no longer involved with the company. However, they then asked how Mr. Weston intends to take control of the company without holding any significant shares, saying that they were ‘at a loss’ to explain how Weston could do this. They then addressed the fact that Whyte Bikes had not been paid the 35k ordered by the courts, saying that the company’s viability and solvency was questionable.
Having branded the press release from Rich Energy as ‘ludicrous’, Storey then went on to mock Haas’ poor race at Silverstone by putting up a photoshopped image of himself driving a Rich Energy liveried milk float, having told The Sun that that’s how he viewed the Haas cars.
Haas have enough
With their patience understandably tested, Haas have since clearly decided to cut their ties with Rich Energy. While there hasn’t been any announcement or formal statement made by the team, Storey himself chose to release a letter on Twitter that showed their decision to release Rich Energy from contract.
Putting up the picture as proof that he had opted to terminate the sponsorship agreement, the letter seems to backfire on Storey by showing that Haas state that the reasons given for Storey pulling the plug are not sufficient grounds for divorce. They say that there was never a performance based clause to the sponsorship, and branded the decision to pull the copyright infringing logo from their car as being sufficient grounds as ‘wholly unsupportable’. The letter states that Haas have decided to accept the termination but, as there is three and a half years of contract still remaining, want the full payment of £35,000,000 they would have received over the course of the deal.
Speaking to RACER magazine’s Chris Medland over the Silverstone weekend, Neville Weston explained the ongoing situation. Moves had been made at Rich Energy to remove William Storey, with him ‘initially playing ball’. Going rogue in the middle of last week, Storey’s moves to terminate the Haas contract haven’t actually happened (according to Weston): “There has been no termination of that deal at all. Nothing’s changed. I think he tried to claim it was performance in the race – there is nothing in the contract that says anything about performance in races, it’s lunacy!”
Speaking about the press release that was released through their subsidiary channel (and through Haas), Weston said: “There’s facts and there’s what he says. I want to be really clear, until we get an injunction or get him shut out of those social media accounts that he’s set up and has the passwords to, he’s probably going to keep doing this stuff for a while, and they are not the views of Rich Energy and the majority shareholders, which is why we made that statement.”
Well, who knows? With Storey apparently in sole full control of the company’s Twitter account, the apparent civil war between him and the minority shareholders of Rich Energy means that it’s gotten ugly. The Ebury Partnership letters were private correspondence between Haas and Rich Energy’s more compliant staff, which Storey has had no problem revealing to the world.
Ebury Partnership nor Haas have not signaled the authenticity of the letters revealed by Storey, but there is little reason to doubt them. Taken at face value, Rich Energy owe Haas £35 million by the 25th of July, must have removed and destroyed all of their stock from the market by the 18th, and have relinquished financial records and any remaining copyright offending stock to Whyte Bikes by the 1st of August. Oh, and they’re already in breach of one court order.
FormulaSpy has been told by a trusted source that a likely scenario is that Rich Energy will become a ‘phoenix company’ ie. a company that rises from the ashes of another one. An explanation of this can be read here. This method would allow Rich Energy to continue as a legal entity after all this mess, and also allow the ‘new’ company to honour the Haas sponsorship deal – should Haas play ball on that front.
Following a board meeting of Rich Energy Ltd chaired by CEO William Storey and in light of the treacherous conduct of minority stakeholders the exclusive rights to distribute @rich_energy have been transferred to another company. Mr Storey retains complete ownership #RichEnergy pic.twitter.com/TXC8v8zM0v
— Rich Energy (@rich_energy) July 13, 2019
Update 9am 16/07/19:
The Rich Energy Twitter account has tweeted to say that Haas’ move to ensure Storey’s removal from the company is grounds for repudiatory breach of contract and states that ‘Mr. Storey was personal guarantor’ for the 4 year contract.
Lobbying for the removal of the CEO, largest shareholder & founder of your title partner is repudiatory breach @HaasF1Team. Mr Storey was also personal guarantor of the contract. It is like @rich_energy seeking to remove Gene Haas! Amidst the noise let's get real. #richenergy pic.twitter.com/dHNPEzJflp
— Rich Energy (@rich_energy) July 16, 2019
Update 11pm 16/07/19:
Rich Energy has been officially renamed. In documents released by the UK’s Companies House, Rich Energy is now called ‘Lightning Volt’ and William Storey has been removed as both a Director and a ‘person of significant control’. Storey’s 6400 shares have been transferred to a man named Matthew Bruce Kells – a man who also appears as a Company Director for eight other companies in the UK.
An initial address change for the new company, possibly entered in error as it was changed again moments later to remove the business name, places Lightning Volt’s new home at The BDG Group. These are an unlicenced insolvency practitioner – one designed to put the requirements of the troubled company first, and not those whom they have a legal obligation or debt to. Their website proudly proclaims that they can’t ‘do anything that breaks the law’, but that they will ‘represent your best interest to help you avoid proceedings and problems.’
This suggests that the story isn’t quite over yet, with Storey selling his shares voluntarily to a company that will do their absolute best to avoid the duty of a licenced insolvency practitioner – those being legal and financial responsibilities to the company’s creditors.
This change of ownership and name doesn’t prevent the court orders applicable to Rich Energy from disappearing and nor does it get them out of their contract with Haas.